UBS Maintains a 'Sell' on ConocoPhillips (COP); Cutting Numbers as Co. Begins Trading as Stand-Alone E&P

May 1, 2012 11:19 AM EDT
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Price: $50.59 --0%

Rating Summary:
    14 Buy, 12 Hold, 2 Sell

Rating Trend: Up Up

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    Up: 0 | Down: 0 | New: 0
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UBS maintains a 'Sell' on ConocoPhillips (NYSE: COP) price target slashed from $64 to $47.

Analyst, William A. Featherston, said, COP ended “when-issued” trading yesterday at $54.95/share, implying an $84bn enterprise value (assuming $12.8bn net debt as of 1Q12). We estimate COP trades at 5.4x ‘12E DACF under futures strip prices, in line w/ the large-cap E&P avg of 5.3x. We expect COP to de-rate to ~4.7x due to below avg prod’n growth, but still >1 turn above its near-peer (Apache (NYSE: APA), Murphy (NYSE: MUR), Hess (NYSE: HES), & Marathon (NYSE: MRO)) avg of 4.0x as we expect its high dividend yield (~4.8%) to support valuation premium in the near term."

FY12 EPS estimate cut from $8.43 to $5.60 and FY13 from $8.22 to $5.25.

For an analyst ratings summary and ratings history on ConocoPhillips click here. For more ratings news on ConocoPhillips click here.

Shares of ConocoPhillips closed at $71.63 yesterday.

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